In recent years, advancements made in computer systems have prompted a move from centralized computing based on timesharing a large mainframe computer to distributed computing based on a connected set of engineering workstations. A major factor in this advancement is the increased performance and lower cost of engineering workstations. The shift to distributed computing from centralized computing has led to challenges associated with the residency of application programs within the system. In a combined system of multiple engineering workstations attached to a mainframe host, the question arises as to how does a system designer assign applications between the larger mainframe host and the smaller, yet powerful, workstation. The concepts related to real time data processing are analyzed and systems are displayed which use a host mainframe and a number of engineering workstations interconnected by a local area network. In most cases, distributed systems can be classified as having a single function or multiple functions and as executing programs in real time or nonreal time. In a system of multiple computers, the degree of autonomy of the computers is important; a system with one master control computer generally differs in reliability, performance, and complexity from a system in which all computers share the control. This research is concerned with generating general criteria principles for software residency decisions (host or workstation) for a diverse yet coupled group of users (the clustered workstations) which may need the use of a shared resource (the mainframe) to perform their functions.